This month’s lower sentiment was fueled by drops in both of the
barometer’s sub-indices and likely triggered by weakened crop
prices. In mid-May, Eastern Corn Belt fall delivery bids for
corn fell over $0.50/bushel (10%), and soybean bids declined
over $1.00/bushel (8%), while new crop June/July delivery wheat
bids declined nearly $0.50/bushel (8%), all compared to bids
available in mid-April, when last month’s barometer survey was
conducted.
The Ag Economy Barometer is calculated each month from 400 U.S.
agricultural producers’ responses to a telephone survey. This
month’s survey was conducted between May 15-19.
“Producers are feeling the squeeze from weakened crop prices,
which has reduced their expectations for strong financial
performance in the coming year,” said James Mintert, the
barometer’s principal investigator and director of Purdue
University’s Center for Commercial Agriculture.
The Farm Financial Performance Index was impacted by lower
sentiment, dropping 17 points to a reading of 76 in May. Crop
price weakness, uncertainty related to U.S. bank failures, and
rising interest rates were likely key factors behind the
decline.
![](http://archives.lincolndailynews.com/2023/Jun/07/images/ads/current/hartsburggrain_sda_PROMGRAD_2023.png)
This month, 38% of respondents said they expect weaker financial
performance for their farm this year, compared to just 23% who
felt that way in April. Higher input cost remains the top
concern among producers in the year ahead; however, concern over
the risk of lower crop and/or livestock prices is growing.
This month 26% of respondents chose lower output prices as their
top concern, compared with just 8% of respondents who felt that
way in September. Meanwhile, nearly three-fifths (59%) of
producers said they expect interest rates to rise during the
upcoming year, and 22% of respondents chose rising interest
rates as a top concern for their farm in the next 12 months.
Additionally, 40% of farmers in this month’s poll said they
expect this spring’s U.S. bank failures to lead to some changes
in farm loan terms in the upcoming year, possibly putting more
financial pressure on their operations.
![](http://archives.lincolndailynews.com/2023/Jun/07/images/ads/current/siu_sda_PROMGARD_2023.png)
Unsurprisingly, the Farm Capital Investment Index was also
lower, down 6 points to a reading of 37 in May. More than
three-fourths (76%) of respondents continue to feel now is a bad
time for large investments. Among those who feel now is a bad
time, two-thirds (67%) cited rising interest rates and increased
prices for machinery and new construction as key reasons.
Producers’ expectations for short-term farmland values fell 13
points to 110 in May and marked the weakest short-term index
reading since August 2020. In this month’s survey, just 29% of
respondents said they expect farmland values to rise over the
next 12 months, compared to 54% who felt that way a year
earlier. In contrast, producers remain more optimistic about the
longer-term outlook for farmland values, as the Long-Term
Farmland Value Expectations Index rose 3 points in May to a
reading of 145.
With farm bill discussions ongoing, this month’s survey asked
respondents what title in the upcoming legislation will be most
important to their farming operation. Nearly half (48%) of
producers said the Crop Insurance Title will be the most
important aspect of a new farm bill to their farms, followed by
the Commodity Title, chosen by 25% of respondents.
In a follow-up question, corn and soybean growers were asked
what change, if any, they expect to see to the Price Loss
Coverage reference prices in a new farm bill. Close to half
(45%) of corn and soybean growers said they expect Congress to
establish higher reference prices for both crops, with very few
(10% and 13%) expecting lower reference prices for soybeans and
corn, respectively.
Read the full Ag Economy Barometer report at https://purdue.ag/agbarometer.
The site also offers additional resources – such as past
reports, charts and survey methodology – and a form to sign up
for monthly barometer email updates and webinars.
Each month, the Purdue Center for Commercial Agriculture
provides a short video analysis of the barometer results,
available at
https://purdue.ag/
barometervideo.
For more information, check out the Purdue Commercial AgCast
podcast available at
https://purdue.ag/agcast, which includes a detailed
breakdown of each month’s barometer and a discussion of recent
agricultural news that affects farmers.
[to top of second column] |
![](../images/060723PIX/unnamed%20(1)_small.jpg)
![](../images/ads/current/llm_yourcherished_lda_RR.png)
The Ag Economy Barometer, Index of Current Conditions and Index
of Future Expectations are available on the Bloomberg Terminal
under the following ticker symbols: AGECBARO, AGECCURC and
AGECFTEX.
About the Purdue University Center for Commercial Agriculture
The Center for Commercial Agriculture was founded in 2011 to
provide professional development and educational programs for
farmers. Housed within Purdue University’s Department of
Agricultural Economics, the center’s faculty and staff develop
and execute research and educational programs that address the
different needs of managing in today’s business environment.
![](http://archives.lincolndailynews.com/2023/Jun/07/images/ads/current/flossie_sda_PROMGRAD_2023.png)
About CME Group
As the world's leading derivatives marketplace, CME Group (www.cmegroup.com)
enables clients to trade futures, options, cash and OTC markets,
optimize portfolios, and analyze data – empowering market
participants worldwide to efficiently manage risk and capture
opportunities. CME Group exchanges offer the widest range of
global benchmark products across all major asset classes based
on interest rates, equity indexes, foreign exchange, energy,
agricultural products and metals. The company offers futures and
options on futures trading through the CME Globex® platform,
fixed income trading via BrokerTec and foreign exchange trading
on the EBS platform. In addition, it operates one of the world’s
leading central counterparty clearing providers, CME Clearing.
![](http://archives.lincolndailynews.com/2023/Jun/07/images/ads/current/comfortinn_PROMGRAD_2023.png)
CME Group, the Globe logo, CME, Chicago Mercantile Exchange,
Globex, and E-mini are trademarks of Chicago Mercantile Exchange
Inc. CBOT and Chicago Board of Trade are trademarks of Board of
Trade of the City of Chicago, Inc. NYMEX, New York Mercantile
Exchange and ClearPort are trademarks of New York Mercantile
Exchange, Inc. COMEX is a trademark of Commodity Exchange, Inc.
BrokerTec and EBS are trademarks of BrokerTec Europe LTD and EBS
Group LTD, respectively. The S&P 500 Index is a product of S&P
Dow Jones Indices LLC (“S&P DJI”). “S&P®”, “S&P 500®”, “SPY®”,
“SPX®”, US 500 and The 500 are trademarks of Standard & Poor’s
Financial Services LLC; Dow Jones®, DJIA® and Dow Jones
Industrial Average are service and/or trademarks of Dow Jones
Trademark Holdings LLC. These trademarks have been licensed for
use by Chicago Mercantile Exchange Inc. Futures contracts based
on the S&P 500 Index are not sponsored, endorsed, marketed or
promoted by S&P DJI, and S&P DJI makes no representation
regarding the advisability of investing in such products. All
other trademarks are the property of their respective owners.
[Writer: Kami Goodwin
Source: James Mintert]
Related websites:
Purdue University Center for Commercial Agriculture:
http://purdue.edu/commercialag
CME Group:
http://www.cmegroup.com/
Agricultural Communications: (765) 494-8415;Maureen Manier,
Department Head,
mmanier@purdue.edu
Agriculture News Page
![](http://archives.lincolndailynews.com/2023/Jun/07/images/ads/current/chittick_sda_PROMGRAD_2023.png) |